What could Brexit mean for the UK property industry? It’s a question that is playing on the minds of many investors and businesses at the moment, as Britain inches closer to exiting the European Union on March 29th, still without an official withdrawal agreement in place.
Jerald Solis, Business Development and Acquisitions Director at Experience Invest, considered this issue in a recent article for Business Leader, providing some insights that could prove valuable for investors at this uncertain time.
The British economy has faced its fair share of uncertainty since the EU referendum result was announced in June 2016, but house price growth has been fairly robust in most regions.
Halifax figures showed that house prices increased by 1.3 per cent in 2018, while cities like Liverpool (6.3 per cent) and Manchester (5.8 per cent) continued to see large year-on-year price growth in December 2018, according to the Hometrack UK Cities House Price Index.
One location that has experienced a significant downturn is London, suggesting that investors seeking capital growth could benefit from looking to other regions after Brexit.
Striking a positive note on the current outlook for prices, Mr Solis wrote: “In light of recent trends, the UK property market looks in good shape to overcome the hurdles that lie ahead.”
One of the most significant economic trends that emerged in the wake of the Brexit vote was the steady decline in the value of the pound.
While this is not welcome news for British travellers heading abroad or businesses buying foreign goods, it has stimulated interest in UK property from overseas. International investors seeking to make the most of their current spending power have taken a greater interest in British real estate.
This helps to explain the recent upturn in prime property sales, with HMRC figures showing a 50 per cent increase in property sales worth more than £10 million in the year following the Brexit referendum.
With demand for homes continuing to exceed supply, the government has committed to delivering 300,000 new properties every year by 2023.
However, Brexit could pose a threat to this goal, largely because the construction sector relies on EU nationals and must be able to continue attracting these workers to deliver the housing stock Britain needs.
As Mr Solis pointed out: “To ensure that the industry is ready to support the nation’s housing needs, it’s important that more attention and resources are directed towards supporting the skills needed to deliver housebuilding.”
Read the Experience Invest Business Leader article for more insights into Brexit, what it means for UK property and what the government can do to secure the future of the construction industry.